Dollar and Inflation

Commodity prices are soaring, watch the inflation data coming out this week, Data manipulated to show no inflation because we need to keep printing! Inflation what inflation. Except for oil which was at 150 at the collapse of Lehman most other commodities are right at 2008 highs or making new all time highs. They keep lying to our face its the same old song. "We won't get fooled again".  I put up a few charts below to highlight what i'm talking about, you can find the rest on stockcharts.com. 

CRB Commodity index at 2008 highs, Copper, Gold and Silver at all times highs recently.

Copper

Cotton

Coal

Sugar

It is my belief that the price of certain commodities isn't moving higher because of supply/demand factors. Prices are moving higher because cheap created by the US Fed and Euro QE (Greece, Ireland, Spain, Portugal, Italy, France) programs. Yesterday the Chinese left interest rates unchanged, Hedge funds cheered, and the buying continued. Commodities are now officially back in bubble territory but as long as the easy money flows, they will move higher.

It is investment demand (money needs to find a home) not supply demand, for example copper isn't going higher due to higher construction demand. Wall Street in its greed has created a whole cornucopia of ETF’s that are commodity related and the money is finding a way there. 

Caution: The nature of these flows is that they are extremely fickle and quite vulnerable to any news or action on the part of monetary authorities to go after the speculators. I am not sure that there is much any of them can do as long as we have free money available for leveraged plays so stay a while with one foot out the door (anything Industrial related Aluminum, copper, steel etc).